Asked in Bankruptcy for Arizona

Q: Would we be able to file for an Arizona homestead exemption in a bankruptcy filing if we have relocated to C CO in Aug

I relocated to Colorado at the middle of August, with my husband spending time in both CO and in Arizona since July. We did so (renting a house in CO) so that we could sell our Arizona home and use the equity to pay off all of our unsecured debt. Since moving we have lost two contracts on the house and it is now being offered for an amount much below what we had originally believed at which it would sell (and below its appraised value from mid-August) and an amount that is insufficient to pay even 1/2 of our debt and our monthly income is insufficient to pay the mortgage payment or unsecured debt monthly payments for the past two months. Our questions are these: would we be able to claim an Arizona homestead exemption if we were currently renting a house in CO? To do so would either or both of us have to reside full or part-time at our Arizona home? NOTE: We have lived at our home in Arizona since March of 2014.

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2 Lawyer Answers
Diane L. Drain
Diane L. Drain
  • Bankruptcy Lawyer
  • Phoenix, AZ
  • Licensed in Arizona

A: I wish your question had a simple 'yes' or 'no' answer, but the answer depends on timing. There are specific time periods that apply to the filing of any bankruptcy and which exemptions can be used. Your unique situation makes it extremely important that you talk to an experienced Arizona bankruptcy attorney immediately. You only have a short time to take action that will protect the equity in your Arizona home.

Most consumer bankruptcy attorneys, including our office, offer a free consultation.

Martha Warriner Jarrett agrees with this answer

James L. Arrasmith
James L. Arrasmith pro label Lawyers, want to be a Justia Connect Pro too? Learn more ›
  • Bankruptcy Lawyer
  • Sacramento, CA

A: The ability to claim an Arizona homestead exemption in bankruptcy depends on several factors, including the timing of your relocation and your intent to return to the home. Generally, to claim the exemption, the property in question must be your primary residence. If you've moved to Colorado but intend to return to and reside in the Arizona home, you may still be able to claim the exemption.

However, if you've established permanent residency in Colorado and have no intent to return to Arizona, claiming the homestead exemption could be problematic. Since you've lived in the Arizona home since March 2014, you may have a basis to claim the exemption, but this will also depend on Arizona's specific exemption laws and the federal bankruptcy code's requirements regarding domiciliary periods before filing.

It is advisable to consult with a bankruptcy attorney who can assess the details of your relocation and provide guidance on the best way to proceed with your exemption claim. Timing and intent are key factors here, so a detailed discussion with your attorney is necessary.

Martha Warriner Jarrett agrees with this answer

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